China Issues Circular Concerning the Improvement of VAT Control System
Jul. 24 – In order to alleviate the burdens on taxpayers, China’s National Development and Reform Commission (NDRC) released the “Circular of the NDRC on Charging Policies Concerning the Improvement of VAT Control System (fagaijiage  No.2155, hereinafter referred to as ‘Circular’)”on July 18, which provides four opinions regarding the price for special equipment related to the VAT control system and the technical maintenance charging polices.
Key information and details taken from the Circular can be found in the summary below.
Further clarifying the offset policy and standards for equipment purchases and the technical maintenance fee
Payments made by VAT payers for purchasing special equipment relating to the VAT control system (including the original golden tax card products and tax control disk products) for the first time after December 1, 2011, and the technical maintenance fee paid after December 1, 2011 can be wholly offset from the VAT taxable income on a timely basis.
Strictly checking and ratifying the price for tax control disk products
Considering the production and product upgradation costs related to special equipment of the VAT control system, the retail prices for the following special equipment for the VAT anti-forgery control system have been temporarily fixed at:
- USB Golden Tax Card: RMB490 each
- Tax Declaration Disk: RMB230 each
For special equipment relating to the special VAT invoice tax control system for freight transportation services – for vehicle sales and for road/inland water freight transportation services – the price is:
- TCG-01 Tax Control Disk: RMB490 each
- TCG-02 Tax Declaration Disk: RMB230 each
Strictly checking and ratifying the fee standards for technical service
Technical service providers engaged in offering services for the VAT control system, while providing the service, are allowed to charge an annual fee of RMB330 per set for each household that uses tax control disk products. For taxpayers who use two sets of tax control disk products, the technical maintenance fee for the second set should be halved.
Further enhancing technical maintenance services and the management of fee-charging activities
While providing services, the relevant technical service providers shall conclude the service contracts with users, and are not allowed to charge any fee unless they strictly perform the duties and service as stipulated in the contract. Each technical provider should offer timely and excellent service based on technical service standards, and shall not refuse to provide service or lower service quality for any reason.
Those offering specific doorstep technical maintenance service without requests from the enterprises shall not provide service or charge fees by force. Vendors and technical service providers shall not, for any reason, make hard-sales or tie-in sales of scanners, computers, printers or any other general facilities; otherwise, they will be investigated and punished for arbitrary charges.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
You can stay up to date with the latest business and investment trends across China by subscribing to The China Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.
Value-Added Tax Reform
VAT reform is a confusing transition for many and introduces a number of additional questions, such as exactly what types of input VAT are now deductible. Confusion about the new laws may also allow opportunistic companies to charge higher prices and blame the increase on the tax reform. To add some clarity to the issue – and VAT in general – this issue of China Briefing takes a look at a number of VAT-related questions.
- Previous Article China Issues Provisions Regarding Penalizing Tax-Collection Related Irregularities
- Next Article China’s Mobile Apps Market